Wells Fargo Advisors LGBT Insight: At Tax Time, What's Changed for Same-Gender Couples

Kyle Young, First Vice President Investment Officer and Accredited Domestic Partnership Advisor , Wells Fargo Advisors, LLC in Short Hills, N.J., addresses the unique financial challenges faced by same-gender partners.

Last year was a time of great change for many lesbian, gay, bisexual and transgendered couples. For the first time in history, the ability to marry became a real option, opening the door to a number of new financial- and estate-planning opportunities. Along with my colleagues, we were asked to assist in advising the readers of DiversityInc through the U.S. Supreme Court cases in 2013 and to provide our thoughts on how those cases financially impacted LGBT couples who decided to marry. Based on the success of those articles, we have again been asked to continue this dialogue into the new year.

As more and more LGBT couples take advantage of this newfound ability to marry, it will quickly become clear that many new financial-, tax- and estate-planning opportunities now exist.

As we head into the final weeks of tax season, it is important for all newly married couples to be mindful of the changes their marriage will bring with regards to tax planning. A few quick tips to consider:

  • Locate an LGBT-Knowledgeable CPA: Working with a tax professional who is well-versed in planning for LGBT couples is key, especially as so many couples transition into a marital situation.
  • New Federal Filing Status: A newly married couple no longer has the ability to file as a Single taxpayer. I advise my clients to run the numbers as Married Filing Jointly AND Married Filing Separately to determine which filing status is most beneficial moving forward.
  • Amended Federal Returns: We all have the ability to amend our tax returns for a three-year period. If you married your same-sex spouse prior to 2013, you may want to consider an amended return back to and including the year of marriage. While meeting with your tax professional, request that he or she review your past three tax returns to see if an amended return might be beneficial for you and your spouse. Note: Time is running out to amend your 2010 return as the amended return would need to be filed by April 15, 2014.
  • Update Marital Status With Your Employer: This update should assure accurate tax withholding moving forward and will avoid the withholding of additional income tax for the imputed income previously required on health-insurance coverage for your same-sex partner.

Once tax season is behind us, stay tuned as my colleagues and I refocus our discussion on a broader set of financial- and estate-planning topics and opportunities for all married LGBT couples.

Wells Fargo Advisors is not a tax or legal advisor. Wells Fargo Advisors, LLC, member SIPC, is a registered broker-dealer and separate nonbank affiliate of Wells Fargo & Company, No. 25 on the 2013 DiversityInc Top 50.

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